GEORGE TOWN: The Penang property market is expected to enter another boom cycle, following signs of a gradual rise in prices due to a limited supply of land in prime areas.
Hunza Properties Bhd (HPB) group executive chairman Datuk Khor Teng Tong said the local property industry was well on the road to recovery as the impact of the financial crisis faded.

Speaking at an analysts' briefing on its financial results for year ended June 30, 2010 (FY10) and update of the group's projects, Khor said prices in the island had been appreciating due to the scarcity of land.

“The Penang property market is on the uptrend following the economic recovery. According to press reports quoting government sources, supply of Penang island properties for the previous year was reduced by 2,600 for various types of residences,” Khor said.

He said this was the best time to invest in property. “With the increase in building materials and rising labour costs, restriction on working hours have also resulted in the increase of property prices on the island. Going forward, the shortfall in supply cannot be addressed and overcome in the short term,” Khor added.

HPB yesterday annnounced an 80% rise in net profit to RM50.8 million – its highest ever – in FY10 from RM28.3 million in the previous year, while revenue rose 172% to RM248.7 million from RM91.4 million.

The increase in revenue was due to the group acquiring 100% of Diamaward (M) Sdn Bhd, accounting for RM104 million of group turnover. Basic earnings per share rose to 31.85 sen from 19.02 sen. It proposed a final single-tier dividend of 5.6 sen per share.

Another factor has been the construction works on the two residential towers of Gurney Paragon which have been progressing well and contributing to higher revenue and attributable profit on percentage of work done and stronger sales this fiscal year.

Khor said once completed, the RM450 million gross development value (GDV) project would be a landmark in Gurney Drive with two blocks of 43-storey condominiums, a shopping mall and an office tower.

He said the RM245 million GDV Infinity project, which obtained its certificate of occupancy recently, had also contributed to the year's result and profit. Contributions were derived from its other projects, the Mutiara Seputeh, with a GDV of RM203 million, and from Hunza Trading.

HPB is expecting major contributions from Gurney Paragon in the new financial year as it will be completed by April/May 2011.

Alila II, with a GDV of RM300 million, a project undertaken by its subsidiary Hunza Properties (North) Sdn Bhd is expected to be launched and to commence construction in the new financial year. Bandar Kepala Batas, a jointly-owned project with Yayasan Bumiputra Pulau Pinang Bhd, is also expected to be launched with 120 units of semi-detached houses.

Another project also in the pipeline is the Segambut highrise project with a GDV of RM300 million.

SOURCE: The Edge Property